Property sector in Vietnam to work on improving financial and legal frameworks

Property sector in Vietnam to work on improving financial and legal frameworks
Dec 23, 2009 - PropertyGuru.com.sg

Enhanced financial and legal frameworks are needed if Vietnam’s emerging real estate market is to grow into a sustained property environment.

Vietnam’s property sector will grow and attract investors next year, but several problems such as environmental pollution, rapid urbanization and low housing cost must be addressed.

Tran Kim Chung of the Central Institute for Economic Management said Vietnam’s real estate market recorded numbers of achievement in the past few years, especially on the country’s urbanization, raising the living standards and modernizing urban landscape.

Mr. Chung told the conference delegates at the Ho Chi Minh City that property market plays an important role in Vietnam’s economy and its growth has attracted more investment capitals. The economic growth of the country will stimulate and elevate other economic sectors, he said.

But the domestic real estate market still had several shortcomings, including a lack of legal framework for real estate bonds, for real estate investment, real estate saving funds and secondary real estate mortgages. Despite several banks granting credit to its clients, the market still needs more funding, said Mr. Chung.

He also said that another problem in the property sector was the lack of transparency, with buyers who do not have sufficient information on their purchases. He also called for the property regulation law to be improved and said issues regarding property information and property finance should also be examined.

Attracting foreign investment is also vital. “We will continue to gradually expand the range of foreign investors involved in the property market. This is one of the important tasks in attracting resources to the domestic property market,” Mr. Chung claimed.

Developers must support the move for change. Chairman and general director of Thu Duc Housing Development Corporation, Le Chi Hieu, said the new policies are vital for the property industry to move forward. “We need a stable and correct assessment of the real estate market and to concentrate more on developing suitable policies relating to the property sector and real estate trading.”

Former chairman of the International Real Estate Federation, Alan Tong, said the country could learn from other property markets in Asia such as Singapore and China to avoid mistakes.